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Apple And IBM Want To Believe It'll Be Different This Time

Apple’s Tim Cook and IBM’s Ginny Rometty certainly sounded persuasive when they announced a broad alliance between the two companies today to sell mobile devices and services to the enterprise. Rometty told Re/code only their two companies could make such a deal happen. Cook noted the lack of competition and said when that happens, “You end up with something better than either of you could produce yourself.”

And in theory it sounds great. Apple gets an enterprise sales force with its long tentacles deep into companies across the globe. IBM gets the devices best suited for those companies in terms of security and trustworthiness with corporate IT. And maybe this is the winning hand both companies think it is. The good news is that neither is really going “all in” to find out.

Remember when HP sold the iPod? That’s OK no one else does either.

History repeating

Most of the reports on the alliance recall the rancorous history between the two firms, which fought for supremacy in the early days of personal computing. Over at the Wall Street Journal, it was described like this: “A partnership between the two companies would have been unthinkable 30 years ago when Apple famously attacked IBM in an iconic commercial entitled ’1984,’ painting IBM as a big-brother-like figure protecting the status quo while Apple’s Macintosh provided a pathway to freedom.”

But the history of Apple and IBM is actually more nuanced. Less than 10 years after that commercial, IBM and Apple entered into an alliance to produce a computer operating system to rival Microsoft Windows, which had captured much of the industry’s value away from both companies. Called Taligent, it was either ahead of its time or a waste of time. Either way, within 3 years of agreeing to work together on it, IBM and Apple dissolved the partnership. Several years later, the failure of Taligent would motivate Apple to buy Next, bringing back Steve Jobs and arguably saving the company from oblivion.

Apple made two other partnerships with IBM back in the 1990s. One, Kaleida, spent several years failing to develop then-sophisticated technology to produce interactive CD-ROMs. As Kaleida died off, the web was coming along and obliterating its very reason for being. The other, the AIM alliance, hoped to build a rival platform to Intel’s personal computer. It, too, mostly got nowhere, though the PowerPC chip it produced would run Apple’s Macs for several years until Apple decided it was time to shift to processors built… by Intel.

Lessons learned

In all of those partnerships, the goals were big, perhaps too big. And the inability to achieve measured success along the way made it that much harder to see the failures in progress — until it was too late. In that respect, the current tie up is very different. Apple and IBM have committed to producing more than 100 apps for specific business uses and while they haven’t disclosed sales goal for Apple products, those doubtless exist.

That allows Rometty and Cook to judge this partnership along the way, giving them a strong sense of whether its hitting its targets. But metrics alone won’t make magic. To best understand why, another history lesson might help. Quick, name the only two companies to ever sell iPods. Obviously, everyone knows Apple, but how many got that HP was the other?

Back when the iPod was just over 2 years old, Apple made a deal that allowed HP to sale a branded version of it. Apple had sold 2 million iPods by then and couldn’t possibly know it would sell around 200 times that many over the next decade. But it knew HP was selling a lot of computers, had a lot of retail distribution and could help extend the iPod’s dominance. HP, for its part, would get a popular product to sell as an add on when everyone was struggling to compete with Apple’s popular music player.

It took only 18 months for the deal to fall apart. As AppleInsider reported, HP was selling less than 10% of iPods despite getting the device into Radio Shack, which had 7000 stores at that point to sell through.

The more things change

Of course, HP of a decade ago isn’t IBM of today and Apple is certainly a far different company. Cook’s Apple is a global powerhouse, making profits the way IBM used to in its heyday. Rometty’s IBM is more than ever a service company, more like Accenture than the computer business of Thomas J. Watson.

To that end, Cook’s statements ring true: You have complementary pieces here. And at least for Apple, perhaps there is some synergy. While the company touts on every earnings call that is iPhone and iPad are in nearly all Fortune 500 corporations, its clear there is room to sell more of each. It’s made small steps to do that, but Apple lacks a deep sales force like IBM’s.

What IBM gets may less substantial. It effectively becomes a retail partner of Apple’s here, like a corporate version of Best Buy. In that respect, if it sells 50,000 iPads in a huge deal down the line, perhaps it will net an extra few million on hardware profits. (And maybe even some more selling service contracts, which are being beefed up for corporate customers as part of this arrangement.)

There’s much to like in the deal if you use an iOS device or are in IT at a firm where they are deployed. As Re/codedescribes it, tools to help separate personal and business data are planned, along with access to cloud-based business applications from Apple devices. In that respect, it’s possible this deal will be a success whether or not it results in lots more iPhones and iPads being sold into enterprises. But history tells us, even getting that much done isn’t guaranteed. These two have danced together before, only to go home separately.

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Taligent was ahead of its time. Many of its visions are now seen in OS/X. Many of the people are now at Apple. It was a good idea with leadership that focused on the right technical ideals but the wrong business goals. Upon its demise, IBM took one key cutting-edge technology from Taligent that is not in use anywhere in IBM offering today. HP took some and also went nowhere. Only Apple continued to realize the old visions and they are showing up now in OS/X and also iOS. The code may be different now but the visions are now reality.

You had to be there, working on it, with those people, to appreciate what it was all about.

By Julie S julie.s@hngn.com | Jul 13, 2014 02:39 PM EDT icon icon Apple Denies China’s Allegation that the iPhone Spies on State Secrets Apple explained to their Chinese customers that the tracking feature on their iPhone cannot be used to spy on an individual, as claimed by a Chinese television channel. (Photo : Reuters) Apple has explained that the iPhone tracking feature cannot be used to spy on an individual, as recently claimed by a Chinese television station.

On Friday, the China Central Television (CCTV) broadcasted that the tracking feature on Apple’s iPhone is capable of collecting data regarding an individual’s activities and this can be used in accessing and leaking state secrets. The report also criticized the “frequent locations” functions in the iOS 7 which captures users’ time and location, the Wall Street Journal reported.

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Apple didn’t immediately respond to the claim. But, on Saturday, the Cupetino, Calif., company broke its silence and denied the allegation.

“We appreciate CCTV’s effort to help educate customers on a topic we think is very important,” the company said in the statement, quoted by Businessweek. “We want to make sure all of our customers in China are clear about what we do and we don’t do when it comes to privacy and your personal data.”

CCTV also criticized other U.S. companies, including Facebook, Google, and Microsoft and stated they can also be used for cyberspying and hacking.

In June, a commentary published on the “People’s Daily” newspaper stated Google, Facebook, Microsoft, and Apple are working with the United States government to spy on China’s state affairs. CCTV also reported a provincial government in the country was discouraged from acquiring computers with Windows 8 because the operating system could be used in accessing the Chinese government’s secret information.

CCTV is an influential television channel in China. According to the Wall Street Journal, some companies were forced to recall their products or change their policies after the channel’s crtiques. It’s uncertain if Apple will follow suit, butApple CEO Tim Cook has apologized for allegedly discriminating against the Chinese last year regarding warranty policies.

Mark, forget about all this history. Here’s what to get: 1) Security – both mentioned many time. 2) Reselling AppleCare – easy money for both, makes iOS sticky, Gandroid has no play, helps Enterprise IT embrace mobile without new staff 3) Reselling AppleCare – Enables Mac Sales, which were locked out due to support. 4) Big counter to Windows mobile – but WinMo is still in contention. 5) Apps – As in the big mission-critical (remember that old phrase)

apple will get what it wants and then screw over. They did it with Samsung, HTC wants to get away from apple. Most companies that do business with apple feel sorry for it because apple is a leach. It may be a few years before it happens but it will happen then IBM will feel sorry for getting into business with them.

Said Robert Kegel: ” Most companies that do business with apple feel sorry for it because apple is a leach. It may be a few years before it happens but it will happen then IBM will feel sorry for getting into business with them.”

Not even a thousandth as sorry as IBM must still feel for going into business with Microsoft. Not a good student of tech history, are we?